Officers formed cordons to separate about 2,000 supporters of the English Defense League from 1,000 members of left-wing group Unite Against Fascism and Muslim organizations marching through Luton, a working-class town near London with a history of racial tension.
Pubs were closed to prevent drunken trouble as the groups held noisy but mostly peaceful rallies half a mile (1 kilometer) apart. Police said seven people were arrested, most for possession of offensive weapons and assault.
The English Defense League says it is a non-racist group set up to oppose the spread of militant Islam. But at previous demonstrations around the country its members have clashed with police, chanted anti-Muslim slogans and made Nazi salutes. One banner at Saturday's march read "No more mosques."
Luton, 30 miles (50 kilometers) northwest of London, is a town of 200,000 with a large Muslim population and an unwanted reputation as a hotbed of extremism. There have been several terrorism arrests in the town in recent years, and it was the home of Taimour Abdulwahab, an Iraqi-born Swede who blew himself up in a Stockholm shopping street in December.
The protest took place on the day Prime Minister David Cameron made a speech at a security conference in Germany, saying Britain and other European countries had been too tolerant of both Islamic extremism and far-right extremists.
In a statement responding to Cameron's speech, the local council and police said that in Luton there was only "a tiny handful of people - of a variety of backgrounds - who have a message of extremism and hate."
"But in Luton, most of us aim to live in harmony and we do just that most of the time," it said.